Questions and Answers of Cambridge International AS And A Level Accounting

Name the three methods that a trader may use to calculate the amount needed. for the provision for doubtful debts.
In which ledger would you find the provision for doubtful debts account?
Identify two factors that cause a non-current asset to depreciate.
Explain the term 'finite'.
In which type of account would you expect to find non-current assets?
In which ledger would you expect to find the machinery account?
A second-hand vehicle is purchased. Because the previous owner charged depreciation on the vehicle, the new owner does not need to. True/False?
A reducing balance method of providing for depreciation of non-current assets is more accurate than the straight-line method. True/False?
What are the double entries to record the provision for depreciation using a reducing balance method?
The inclusion of purchases returns in a trading account has the effect of increasing/decreasing gross profit. (Delete the incorrect word.)
Returns that occur in the last week of a financial year can be ignored. They can be included in the following year's financial statements. True/False?
State how the value of goods available for sale is calculated.
State what is meant by cost of sales.
Another name for returns inwards is purchases returns. True/False?
Purchases returns are also known as returns outwards. True/False?
Carriage inwards is deducted from sales revenue. True/False?
Carriage outwards is added to purchases. True/False?
Sales $37980; sales returns $356; purchases returns $299. What is the value of net sales?
What is a provision?
Fill in the following gaps.a. Non-current assets are shown on the________ side of real accounts in the general ledger.b. All assets with a________ life should be depreciated.c. Only the asset
Name two methods of calculating annual depreciation.
On which side of a trial balance would you find rent receivable?
What is an error of original entry?
What does the term 'overcast' mean?
A trial balance balances. Therefore there are no mistakes in the ledgers. True/ False?
What is the difference between an error of principle and an error of commission?
The debit column of a trial balance totals $230 150 and the credit column totals $230000. What amount will be entered in a suspense account?
What does the mnemonic CROPOC stand for?
What does the term 'casting' mean?
Why would a trader prepare a bank reconciliation statement?
How often is a bank reconciliation statement prepared?
Explain the term 'drawer'.
What is a standing order?
What is the difference between a standing order and a direct debit?
What is meant by the term 'overdrawn'?
A bank statement shows a closing credit balance. Does this indicate that the business is running an overdraft?
Why are credit transfers often missing from the bank columns of the cash book?
Explain why debit entries in a cash book are shown as credit entries on a bank statement.
Explain the term 'trade receivables'.
A trade debtor is the same as a trade receivable. True/False?
Urooj owes you $100 for goods she purchased last month. Is she a trade debtor or a trade receivable?
Is trade discount entered on the debit or credit side of the sales ledger control account?
Sales returns is entered on the credit side of a sales ledger control account. True/False?
Explain the term 'trade payables'.
Trade creditors are the same as trade receivables. True/False?
You owe Barbi $70 for goods you purchased last month. Is Barbi a trade payable or a trade creditor?
Is trade discount entered on the debit or the credit side of a purchases ledger control account?
Purchases returns is entered on the debit side of a purchases ledger control account. True/False?
Explain two reasons why debit balances might appear in a purchases ledger control account.
Is it possible for there to be both debit and credit balances on a sales ledger control account at the end of a month?
State a reason why there could be a credit balance on a sales ledger control account at the end of a month.
Why might a business maintain control accounts?
Give an example of a business that would not maintain a sales ledger control account.
How often would a business prepare control accounts?
In which control account would you expect to find purchases returns?
In which control account would you expect to find a provision for doubtful debts?
In which control account would you expect to find bad debts?
Explain one advantage of maintaining control accounts.
Explain how a debit balance might arise in a purchases ledger account.
Explain how a credit balance might arise in a sales ledger account.
'Set-offs' are always found on the________ side of a sales ledger control account.
Define the term 'asset'.
What is meant by the term 'liability'?
Give an example of a liability typically found on the statement of financial position for a restaurant.
What is meant by the term 'trade creditor'?
What is meant by the term 'trade receivables'?
Explain what is meant by the term 'capital'.
Explain the reason that a statement of financial position will always 'balance'.
Why is capital usually shown in a statement of financial position as a liability?
What is the term used to describe how easily an asset can be turned into cash?
In each pair of assets identify the most liquid:a. Premises or vehiclesb. Inventory or plant and machineryc. Trade receivables or land and buildings.
A general store receives $200 from the sale of a display cabinet that is no longer used. Is this an example of capital income or revenue income or capital expenditure or revenue expenditure?
A food store purchases a cash register for use in the store. Is this an example of capital income or revenue income or capital expenditure or revenue expenditure?
Which are most liquid, non-current assets or current assets?
Explain the main difference between a non-current liability and a current liability.
What is meant by the reverse order of liquidity?
In a statement of financial position, inventory appears before vehicles. True/False?
In a statement of financial position, premises appears before machinery. True/False?
Financial years always end on 31 December. True/False?
A financial year can run from 15 January 2014 until 27 October 2014. True/False?
A financial year can run from 1 February 2014 until 31 January 2015. True/False?
Why does the accounting equation always balance?
What is the main difference between a non-current asset and a current asset?
In which part of a vertically presented statement of financial position would you expect to find trade receivables?
Can we prepare a statement of financial position on 29 April?
Explain why non-current assets are valued at cost in a statement of financial position.
Give an example of a liability typically found in a retail shop selling DVDs.
Why must a statement of financial position always balance?
What is the difference between a non-current liability and a current liability?
Why is capital shown as a liability in a statement of financial position?
Could a business have a financial year which runs from 19 June until 30 May the following year?
Explain how one type of business can include a delivery van as a current asset on its statement of financial position, and yet another type of business includes a similar delivery van as a
Explain the circumstances that could result in a long-term bank loan being shown in a statement of financial position as a current liability.
Define the term 'profit'.
Define the term 'loss'.
Could the owner of a business prepare a statement of financial position on 9 December or 23 June or today?
Explain what * represents in the following equation: Assets Liabilities = Capital
Profit = Income - expenditure. True/False?
Capital = Non-current assets + Current assets - All external liabilities. True/False?
Retained profits are the profits held by the business's bankers as security on a loan. True/False?

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